Plan….Summary Plan Description…Which One Governs?
The U.S. Supreme Court has recently rendered an important opinion relating to the role of a summary plan description (SPD). In CIGNA Corp. v. Amara, 2011 WL 1832824 (U.S. 2011), the Supreme Court ruled that the SPD is not part of the plan document. Of particular note, the terms of the SPD that may be in conflict with the plan document, cannot, in effect, amend the terms of the plan. In other words, the terms of the plan govern. This is a departure from some lower court decisions.
While this decision should come as welcome news to employers, the Court, in its commentary, went on to say that a participant harmed by incorrect information in the SPD may have a cause of action for equitable relief. The important take-away from this case is that it is very important that the SPD accurately reflect the terms of the plan.
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